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Jan. Retail Sales Up, Prior Data Revised Down

On February 14, 2012, in Economy, by Tim

The Commerce Department reported(.pdf) that retail sales in the U.S. rose 0.4 percent in January after downwardly revised gains in each of the two prior months, the November sales gain being reduced from 0.4 percent to 0.3 percent while December sales, initially reported as a gain of 0.1 percent were revised to a gain of just 0.02 percent.

Flagging auto sales were the primary reason for the January total coming in below consensus estimates for a gain of 0.6 percent. Auto sales fell 1.1 percent last month, pacing the declining categories, while sales at general merchandise stores (up 2.0 percent), gas stations (up 1.4 percent), and grocery stores (up 1.3 percent) led the advancing categories.

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Consumer Sentiment Stops Rising

On February 10, 2012, in Economy, by Tim

For the first time in six months, the Reuters/University of Michigan consumer sentiment index stopped rising, falling from 75.0 in January to 72.5 in the first of two readings for February. This follows a decline in the consumer confidence index last week, the first time that the other major gauge of the American mood has declined since last fall.

The current conditions component within the sentiment survey dropped from a lofty 84.2 in January to 79.6 in February while the expectations component fell from 69.1 to 68.0.

Recall that, while these readings are a great improvement from the lows seen last summer as elected officials were debating a debt ceiling increase, they remain levels more often associated with recessions than recoveries as depicted in this graphic from the St. Louis Fed. In fact, during the 2001 recession, consumer sentiment never fell below 80.

Rising optimism about an improving labor market was more than offset by higher gasoline prices (and perhaps the hangover of holiday credit card bills coming due), though higher prices at the pump didn’t show up in the inflation expectations survey as the one-year outlook for the rise in consumer prices fell from 3.2 percent to 3.1 percent while the five-year view of inflation rose two tenths of a percent to 2.9 percent.

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Confidence (and Credit Card Usage) Soar

On February 8, 2012, in Debt, Economy, by Tim

The big question now is that of sustainability – what happens in the months ahead – but, since the crisis over the debt-ceiling increase was (temporarily) solved last summer and the jobless rate began to turn down, we ‘Mericans have become an optimistic bunch and this Gallup survey provides the latest confirmation.

And optimistic ‘Mericans tend to borrow and spend, more of that being confirmed in yesterday’s report on consumer credit that showed another monthly gain for outstanding credit card balances after declining steadily for years after the 2008 financial creisis and recession. Jake has details on that in this item at EconomPicData.

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Surge in Consumer Confidence Stalls

On January 31, 2012, in Economy, by Tim

Following word that home prices continued to fall last fall as noted here earlier today, news comes from the Conference Board that consumer confidence declined for the first time in three months, down from an upwardly revised 64.8 in December to 61.1 in January.

Importantly, this is the first major gauge of the mood of the consumer to reverse course in recent months as, apparently, those holiday credit card bills have begun to take a toll.

Recall that a surprising surge in credit card usage during the fourth quarter was credited with driving holiday sales higher and, now that those November and December charges are starting to show up in mailboxes in January, the mood is not quite as festive.

Well, gasoline prices starting to rise again doesn’t help either…

The present situation component nearly reversed last month’s gain, falling more than 8 points to 38.4, while the expectations component also declined, from 77.0 in December to 76.2 in January. One-year inflation expectations rose from 5.3 percent to 5.5 percent, in stark contrast to Fed Chief Ben Bernanke’s claim that inflation is too low.

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Retail Sales Up 0.1%, Down 0.2% Ex-Autos

On January 12, 2012, in Economy, by Tim

The Commerce Department reported(.pdf) that retail sales in the U.S. came in well below expectations last month, rising 0.1 percent in December following an upwardly revised increase of 0.4 percent in November. Excluding automobiles, sales fell 0.2 percent after a gain of 0.3 percent the month prior.

Apparently, American consumers bought nearly all of their iPads, iPhones, and big screen TVs in November as electronics & appliance stores saw sales plunge 3.9 percent in December, the largest decline amongst six of the 13 categories where sales were lower. Gasoline station sales fell 1.6 percent due to a plunging price at the pump and sales at general merchandise stores fell 0.8 percent.

Motor vehicle sales rose 1.7 percent last month and home improvement stores saw a 1.6 percent increase to lead the advancing categories as food and clothing sales both rose 0.7 percent. On a year-over-year basis, overall sales were up 6.5 percent and, for all of 2011, sales rose 7.7 percent, both fairly impressive increases given the slow economic recovery.

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Americans Gorge on Credit Card Offers

On January 10, 2012, in Economy, Our Culture, by Tim

It would appear that the Federal Reserve’s guarantee of freakishly low interest rates until at least 2013 (soon to be extended into 2014 or beyond) and the resulting push by credit card companies to clog mail boxes with all sorts or tempting offers had the desired effect on Americans as they racked up new credit card debt in November at a rate not seen since before the wheels fell of the global financial system back in early-2008.

The data for December might be even more impressive since, what U.S. citizen in their right mind wouldn’t borrow a thousand dollars or two to get that big flat screen TV and new sound system at Christmas time if they could do so without incurring any interest charges and making only minimal payments for the next year or two.

While some say this indicates renewed confidence in the U.S. economy – one where 70 percent of all activity is based on consumer spending -  others think this is akin to a drunk “falling of the wagon” after almost three years of sobriety.

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